TRADE Minister Paula Gopee-Scoon on Tuesday in the Senate listed the Government's measures to keep food affordable, replying to Opposition Senator Wade Mark asking how they would mitigate prices rises in food and cooking oil.
She said the Central Bank's Monetary Policy Report for May recalled food inflation at 7.9 per cent (year on year), with headline and core (non-food) inflation at 4.1 and 3.2 per cent respectively.
Headline and core inflation in March were each zero, while food inflation was -0.2 per cent, all suggesting inflation in TT was levelling off.
However, she warned of new influences on inflation such as the war in Ukraine and other supply-chain disruptions, amid higher world food prices and shipping costs plus logistical delays.
"The FAO (Food and Agricultural Organisation) estimated that international food and feed prices could rise between eight per cent to 20 per cent as a result of the Russia-Ukraine conflict. Russia and Ukraine are known as the breadbaskets to the world and together, they account for close to 30 per cent of the world’s exported wheat."
Gopee-Scoon said Russia was also a key supplier for fertilisers, needed by virtually all food-crops.
"Generally, global inflation is on the rise. In the US inflation in May 2022 accelerated to a 40 year high of 8.6 per cent on account of higher energy and food prices. Similarly,... euro area inflation in May 2022 was recorded at 8.1 per cent largely driven by high energy and food prices, supply bottlenecks and the normalisation of demand as economies reopened.
"Inflation in Trinidad and Tobago at this time, at 4.1 per cent year on year, is thus well below the USA, but it is a cause for concern, because we are not immune from global events.
She said international food prices have been rising.
Gopee-Scoon said the Government had been working proactively to monitor and address rising food prices.
She listed the removal of VAT on basic food items (in the last budget) and removal of the common external tariff (CET) on 20 basic foods, plus supplying an extra US$650 million in foreign exchange via the Exim Bank for local manufacturers and importers of raw materials, basic food items and essential goods.
"The Government is committed to boosting agriculture output in Trinidad and Tobago. To this end, the Government is currently implementing a $300 million agriculture stimulus package. "Linkages are also being strengthened to promote greater synergies between industry and the domestic agriculture sector."
She highlighted the food price monitoring mechanism being carried out by her ministry's Consumer Affairs Division by way of monthly and quarterly price surveys of key retail outlets, namely supermarkets, poultry shops, hardware stores, medicine and pharmaceutical products at pharmacies. "These surveys are published monthly on social media and quarterly in the printed press."
Gopee-Scoon boasted of the $37 million flagship Export Booster Initiative (EBI) run by the Government with the TT Manufacturers’ Association (TTMA) and exporTT, hoping this would double the value of non-energy manufacturing exports from $3.5 billion in 2019 to $7 billion by 2025.
"The SME Stimulus Guaranteed Loan Facility is a government-sponsored loan programme of up to $300 million to help micro, small and medium-sized businesses impacted by the covid19 pandemic." She said another such SME loan facility worth $500 million would soon be launched.
Mark asked if the Government would zero-rate any more food items.
Gopee-Scoon said, "At the fiscal 2022 national budget presentation, quite a lengthy list of items was on offer for the zero-rating of basic food items.
"But I know this Government is quite concerned about the population, the effect of increasing prices and we will always have in mind the needs of the population and of course these matters will remain before us always."
Mark asked if the Government would look to further reduce the CET on items such as condensed milk which attracts a 30 per cent duty.
Gopee-Scoon said within the Caricom region, Jamaica supplies ample amounts of condensed milk which is exempt from duty, which only applies to product imported from outside of the region.